Excerpts:

The purported affidavit of Tamara Price, “Vice President of CITI RESIDENTIAL LENDING MORTGAGE, a
servicing agent who has power of attorney for the plaintiff,” does not contain a jurat, and there is
no language of oath or affirmation. The absence of a jurat renders the “affidavit” inadmissible as
there is no evidence that an oath or affirmation was taken (Pagano v Kingsbury, 182 AD2d 268
[ 2d Dept 19921; see also, People v Lieberman, 57 Misc 2d 1070 [Sup. Ct 19681). Moreover, the
purported power of attorney pursuant to which 1 he affidavit was assertedly prepared is not
annexed to the motion papers, and the submissions do not otherwise establish the authority of an
officer of plaintiffs servicer to execute the affidavit on behalf of plaintiff.

Moreover, the submissions do not reflect the authority of Tamara Price, a
self-described “authorized agent” of AMC Mortgage Services, hc., a
non-party to this mortgage foreclosure action, to represent plaintiff in this action, nor do the
submissions contain evidence that AMC Mortgage Services, Inc. is the attorney in fact for the
plaintiff in this action, as alleged in the affidavit of Ms. Price. Similarly, the assignment whereby
the mortgage was purportedly assigned to plaintiff was executed by Tamara Smith on behalf of
AMC Mortgage Services, Inc. as “authorized agent” for the assignor, without any evidence of
such agency. Accordingly, the motion is denied, with leave to renew upon proper submissions
that address the deficiencies identified herein.

#4 FROM JUDGE SCHACK

According to plaintiffs application, defendant Ezaguis’ default began with the
nonpayment of principal and interest due on September 1,2006. Yet, more than five
months later, plaintiff DEUTSCHE BANK was idling to take an assignment of a
nonperforming loan from AMERIQUEST. Further, both assignor AMC, as Attorney in
Fact for AMERIQUEST, and assignee, DEUTSCHE BANK, have the same address, 505
City Parkway West, Orange, CA 92868. Plaintiffs “affidavit of amount due,” submitted
in support of the instant application for a default order of reference was executed byTamara Price, on February 16, 2007. Ms. Price states that “I am the Vice President for
DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE OF
AMERIQUEST MORTGAGE SECURITIES, INC., ASSET-BACKED PASS
THROUGH CERTIFICATES, SERIES 2004-R1( 1, UNDER THE POLING AND
SERVICING AGREEMENT DATED AS OF OCTOBER 1,2004, WITHOUT
RECOURSE (DEUTSCHE BANK.” However, i he February 7,2007 assignment from
AMERIQUEST, by AMC, its Attorney in Fact, is executed by Tamara Price, Vice
President of AMC. The Tamara Price signatures on both the February 7,2007 affidavit
and the February 16,2007 assignment are identical. Did Ms. Price change employers
from February 7,2007 to February 16,2007? The Court is concerned that there may be
fraud on the part of AMERIQUEST, or at least malfeasance. Before granting an
application for an order of reference, the Court requires an affidavit from Ms. Price,
describing her employment history for the past three years. Further, irrespective of her
employment history, Ms. Price must explain why DEUTSCHE BANK would purchase a
nonperforming loan from AMERIQUEST, and why DEUTSCHE BANK shares office

THE BIGGIE

#5 JUDGE SCHACK_DBNT v. CLOUDEN

In the instant action, Argent’s defective assignment to Deutsche Bank affects the
standing of Deutsche Bank to bring this action. The recorded assignment from Argent to
Deutsche Bank, made by “Tamara Price, as Authorized Agent” on behalf of “AMC
Mortgage Services Inc. as authorized agent,” lacks any power of attorney granted by
Argent to AMC Mortgage Services, Inc. and/or Tamara Price to act on its behalf. The
first mortgage assignment, from Grand Pacific Mortgage to Argent, was proper. It was
executed by the President of Grand Pacific Mortgage.

Effective December 1, 2010, Federal Rule of Civil Procedure 26 will provide new protections and specifications for draft expert reports and certain communications between experts and attorneys. The amendments are significant because they extend work-product protection to communications and drafts that courts now consider discoverable. Current Rule 26(a)(2)(B) requires a testifying expert to disclose in a written report all “data or other information” the expert “considered” in developing his or her opinions. Courts have interpreted that language, and particularly the Rule’s reference to “other information,” to allow discovery of draft expert reports, a broad range of communications between experts and counsel, and documents an expert does not rely upon as a basis for his or her testimony. The 2010 amendments substantially alter these disclosure obligations by: (1) limiting the required disclosures in written expert reports to “facts or data” the expert considered in forming the opinions the expert will express in his testimony; (2) expressly shielding from discovery draft reports or disclosures required under Rule 26(a)(2); and (3) limiting discovery of communications between a party’s attorney and any witness required to provide a Rule 26(a)(2)(B) report unless the communications fall within at least one of three enumerated exceptions.

THIS IS NOT Intended to Be Construed or Relied upon as COMPETENT LEGAL ADVICE—Readers are urged to obtain competent legal representation to review their facts. I am not an attorney and this is not legal advice.

The standing Chapter 13 Trustee for the Northern District of Mississippi, Locke Barkley, has joined the case on behalf of herself and of all Chapter 13 Trustees in the US.

and also

The filings were amended to add counsel with class action expertise. On the Federal case, in Mississippi, CaseyGerry has joined the case. The head of the firm, David Casey, is a former president of the Association of Trial Lawyers of America. Cases his firm has handled include Exxon Valdez and the California tobacco case. In other words, this is a heavyweight player. On the Kentucky case, McGowan & Hood, a firm which has won major class actions lawsuits, including medical device cases, has signed up.

DECISION GRANTING SANCTIONS FOR MOTION TO LIFT STAY BASED ON FALSE CERTIFICATION

In In re Gorshstein, 285 B.R. 118 (Bankr. S.D.N.Y. 2002) I granted sanctions against secured creditors in three separate cases where the secured creditors moved to vacate the automatic stay on the basis of false certifications of post-petition defaults. The Gorshstein decision was “provoked by an apparently increasing number of motions in this Court to vacate the automatic stay filed by secured creditors often based on attorney affidavits certifying material post-petition defaults where, in fact, there were no material defaults by the debtors.” 285 B.R. at 120.

The Secured Creditor’s motion to lift the stay in this case is, in the vernacular, a “poster child” for the type of abuse condemned in the Gorshstein decision. It is one of several such motions to come before me in recent months. This decision granting substantial sanctions in favor of the debtor and her attorney is published to reiterate and reinforce my strongly-held view that debtors must not be subjected to the risk of foreclosure and loss of their homes on the basis of false certifications of post-petition defaults.

Jurisdiction

This Court has jurisdiction over this contested matter under 28 U.S.C. §§ 1334(a) and 157(a) and the standing order of reference in this District dated July 10, 1984 (Acting Chief Judge Ward).

This is a core proceeding under 28 U.S.C. § 157(b).

The Facts

By Notice of Motion and Application both dated June 1, 2007 Deutsche Bank Trust Company of America’s f/k/a Bankers Trust Company, as Trustee c/o Homecomings Financial, LLC (the “Secured Creditor”) moved to terminate the automatic stay with respect to the debtor’s residential real property in Stony Point, New York (the “Property”). The Secured Creditor holds by assignment a note dated October 9, 2001 in the amount of $284,750.00 secured by a mortgage on the Property. The Application recited that as of May 30, 2007 there was an unpaid principal balance on the loan of $278,043.61 with interest thereon in the amount of $20,553.51 plus late charges in the amount of $946.28, aggregating $299,543.40.

The debtor filed her petition under Chapter 13 on September 21, 2004. Thus, the debtor’s first post-petition mortgage payment was due for October 2004. Paragraph 3 of the Application states as follows:

As of the 30th day of May, 2007, the Debtor has failed to make 4 post-petition payments in the amount of $4,020.03 which represents the payments due the 1st day of February, 2007 through May, 2007 and has not cured said default.

As amplified below, this statement was false.

Annexed to the Application was an affidavit sworn to by John Cody, an Assistant Vice President of Homecomings Financial Network, sworn to April 3, 2006 in which Mr. Cody swore in paragraph 5:

As of the 31st day of March, 2006, the Debtor has failed to make 2 post-petition payments in the amount of $3,709.17 which represents the payments due the 1st day of February, 2006 through March, 2006 and has not cured said default.

The Cody affidavit was submitted in support of a motion filed by the Secured Creditor in 2006 and was erroneously annexed to the instant motion. The quoted statement from the Cody affidavit was false when made in 2006. Belatedly recognizing that the Cody affidavit applied to the Secured Creditor’s baseless 2006 motion to lift the stay, on June 8, 2007 counsel for the Secured Creditor filed an affidavit sworn to by Dory Goebel, a Bankruptcy Representative of Homecomings Financial, LLC, sworn to June 1, 2007.

In paragraph 5 of his affidavit, Mr. Goebel swore as follows:

As of the 30th day of May, 2007, the Debtor has failed to make 4 post-petition payments in the amount of $4,020.03 which represents the payments due the 1st day of February, 2007 through May, 2007 and has not cured said default.

Mr. Goebel’s sworn statement quoted above was false.

The instant motion was noticed for presentment on June 14 with a hearing date of June 20, 2007 if objections were timely served and filed. On June 6 counsel for the debtor filed the debtor’s affirmation in opposition noting that since the filing of her case she had made all post-petition payments required under the mortgage, and all such payments were cashed by the Secured Creditor.

Copies of the debtor’s payment checks were attached to the opposing affirmation. The debtor sought punitive sanctions for the “frivolous motion,” the Secured Creditor’s second such motion. The Secured
Creditor’s attorney responded with a “Reply Affirtmation [sic] in Support of Secured Creditor’s Motion
to Terminate the Automatic Stay” dated June 13, 2007 (the “Reply Affirmation”). The Reply Affirmation
noted that the initial Application incorrectly annexed the 2006 Cody affidavit and substituted the June 1, 2007 Goebel affidavit quoted above as Exhibit B. The Reply Affirmation also annexed as Exhibit C a document entitled “Post Petition Payment History for: Eileen Fagan BK Case No. 04-23460” with a notation at the bottom “ledger prepared on 06/13/07.” This “Post Petition Payment History” is one of several such documents submitted by the Secured Creditor, all of which are of central importance on this contested matter because, as explained below, they all demonstrate that the debtor was substantially current at all times post-petition. Despite Exhibit C, the Reply Affirmation concludes “that as of the Date of the Motion, the Debtor was due for the Months of February 2007 through May 2007 and the Month of June 2007 had become due.” As amplified below, Exhibit C demonstrates that this statement was false.

The debtor responded by submitting a July 10, 2007 “Sur-Reply Affirmation in Opposition and Request for Attorney Fees” signed by Linda Fagan, the debtor’s mother. The Sur-Reply Affirmation stated in relevant part as follows:

3. My daughter had a nervous breakdown aggravated by this bank about two years ago. Since then, I made each of the monthly mortgage payments to Homecomings which is the servicer for Deutsche Bank Trust Company and they have CASHED thy [sic] payments.

4. The latest submission is an outright lie, deceptive and deliberately out of order. . . .

5. Homecomings said they did not get the March 2007 payment and I immediately went to Western Union and sent them payment — which they accepted –- the day I found out about it.

6. Homecomings deliberately holds the mortgage payment checks for several weeks and then cashes them to create late fees and penalties. They also hold the checks for months, and then put two or three checks all in at once to create a bounce check situation.

7. I sent the May 2007 mortgage on or about May 14, 2007. When the check did not clear, I immediately called Homecomings when our May bank statement was received and inquired if they received the check. After being on hold for 45 minutes, they acknowledged that they received the check, but the account servicing agent did not know why it was not cashed. I called again two weeks later and they now said they never got the check. I called my attorney and he advised me to stop the check and then overnight another check on June 13, 2007. Even though they received it by OVERNIGHT courier on June 14, 2007, it was not cashed until June 27, 2007. See Exhibit “A”.

8. Incredulously [sic], they then tried to cash the May 2007 “lost check” which I stopped (they first said they received and then said they never received) and then sent me notice to me [sic] in July that the check was “returned unpaid”. See Exhibit “B”.

7. [sic] I AM CURRENT. I have not missed a payment and am paying more than I have to. . . .

It is significant that no affidavit contesting Linda Fagan’s statements was submitted by the Secured Creditor.

A hearing on the motion was held on July 17, 2007 attended by the attorneys for both sides. At the hearing the Secured Creditor submitted a revised but undated “Post Petition Payment 1 Paragraph 6 of the Supplemental Reply Affirmation states:

6. This Law Firm regrettably concedes that during the preparation of the Motion for Relief from Stay and the Bank Affidavit, it erroneously represented that the Debtor was due for the months of February through May of 2007 when in fact the Debtor was due for the months of April through May of 2007. (Emphasis in original)

History for: Eileen Fagan,” which I received in evidence as Court Exhibit 1. After hearing oral argument of counsel, I adjourned the hearing to August 22 in order to give the Secured Creditor an opportunity to make a further submission demonstrating, if it could, that the debtor was in arrears post-petition, which did not appear likely in view of the original “Post Petition Payment History” prepared on 06/13/07 and the amended “Post Petition Payment History” marked Court Exhibit 1. After oral argument at the August 22 hearing, I scheduled a final hearing for September 18.

The Secured Creditor’s attorney then submitted a “Supplimental [sic] Reply Affirtmation [sic] in Support of Secured Creditor’s Motion to Terminate the Automatic Stay” dated August 31, 2007 (“Supplemental Reply Affirmation”). The Supplemental Reply Affirmation annexes as Exhibit C a copy of the “Post Petition Payment History” which was marked as Court Exhibit 1 at the July 17 hearing. It also annexes as Exhibit B yet another “Post Petition Payment History” (undated) with numbers slightly different from the numbers contained on Exhibit C (Court Exhibit 1). The Supplemental Reply Affirmation acknowledged error in the original motion,1 but concluded that “when the Motion for Relief was filed on June 1, 2007, the Debtor was delinquent with her post-petition mortgage obligations and due for the months of April 2007 through May 2007.” Once again, as amplified below, all three versions of the Secured Creditor’s Post Petition Payment History demonstrate that the debtor has never been materially delinquent in her post-petition mortgage obligations.

Paragraph 15 of the Supplemental Reply Affirmation states that “As per the most recent information received from the Secured Creditor, the Debtor has paid monies subsequent to the filing of the Motion that would bring her post-petition current.” The Affirmation notes further that the debtor has commenced a 16-count adversary proceeding complaint against the Secured Creditor which raises, inter alia, certain of the allegations of bad faith asserted by the debtor against the Secured Creditor in opposing the motion to lift the stay. Consequently, in the “Wherefore” clause “Secured Creditor respectfully requests a finding that its Motion for Relief dated June 1, 2007 was filed in good faith and said Motion be marked withdrawn with the parties to litigate the issued [sic] raised by the Debtor in her opposition in detail within the confines of the now pending Adversary Proceeding.”

At the September 18 third and final hearing on this motion to lift stay, I asked the Secured Creditor’s attorney to explain and confirm the significance of the several Post Petition Payment History computer printouts submitted by Secured Creditor in purported support of the motion. To that we now turn.

The Debtor’s Post-Petition Payment History For purposes of this analysis, I shall focus on the Post Petition Payment History which was submitted by the Secured Creditor at the July 17 hearing and marked as Court Exhibit 1, a copy of which was submitted as Exhibit C to the Secured Creditor’s Supplemental Reply Affirmation.

Since the debtor’s Chapter 13 case was filed on September 21, 2004, the first postpetition mortgage payment was due October 1, 2004, with a two-week grace period.

The following reproduces the Court Exhibit 1 version of the debtor’s Post Petition Payment History in material part:

2 The “Date” column apparently lists the dates when the Secured Creditor cashed and/or credited the debtor’s payments, not the dates when the payments were delivered to or received by the Secured Creditor. See paragraph 6 of the Linda Fagan affirmation, quoted above.

<SNIP>

Conclusion

Motions to lift the stay may be routine and inconsequential to secured creditors and their counsel. But to a debtor and his or her family, such a motion and the consequent loss of the family home may be devastating. Most creditors and counsel are conscientious. But some are callous by design or inadvertence, as exemplified by this motion and two others presented to the Court the same week. The danger here is that a debtor who does not have an attorney or the resources of intellect or spirit to defend against a baseless motion may lose his/her home despite being current on post-petition mortgage and plan payments.

I know of no way to protect against such an eventuality if no material consequence attaches to the filing of motions based upon false certifications of fact. Secured creditors and their counsel who know that filing a false motion to lift the stay will result in material sanctions if caught will undoubtedly be motivated to a higher standard of care.

Does MERS have any salaried employees?
A No.
Q Does MERS have any employees?
A Did they ever have any? I couldn’t hear you.
Q Does MERS have any employees currently?
A No.
Q In the last five years has MERS had any
employees?
A No.
Q To whom do the officers of MERS report?
A The Board of Directors.
Q To your knowledge has Mr. Hallinan ever
reported to the Board?
A He would have reported through me if there was
something to report.
Q So if I understand your answer, at least the
MERS officers reflected on Hultman Exhibit 4, if they
had something to report would report to you even though
you’re not an employee of MERS, is that correct?
MR. BROCHIN: Object to the form of the
question.
A That’s correct.
Q And in what capacity would they report to you?
A As a corporate officer. I’m the secretary.
Q As a corporate officer of what?
Of MERS.
Q So you are the secretary of MERS, but are not
an employee of MERS?
A That’s correct.

etc…
How many assistant secretaries have you
appointed pursuant to the April 9, 1998 resolution; how
many assistant secretaries of MERS have you appointed?
A I don’t know that number.
Q Approximately?
A I wouldn’t even begin to be able to tell you
right now.
Q Is it in the thousands?
A Yes.
Q Have you been doing this all around the
country in every state in the country?
A Yes.
Q And all these officers I understand are unpaid
officers of MERS?
A Yes.
Q And there’s no live person who is an employee
of MERS that they report to, is that correct, who is an
employee?
MR. BROCHIN: Object to the form of the
question.
A There are no employees of MERS.

YOU ARE HEREBY ORDERED to appear before this court on Thursday, September 2, 2010 at 1:30 p.m., U.S. Bankruptcy Court, 38 South Scott Avenue, Courtroom 446, Tucson, AZ 85701 and show cause, if any, why sanctions should not be imposed on you pursuant to Fed. R. Bankr. P. 9011, 3001, Local Bankruptcy Rules 4001(e) and 9011-1 and 11 U.S.C. § 105 for the following conduct relating to a proof of claim (“POC”) filed on November 28, 2008, and a Motion for Relief from Stay (“MRS”) filed on January 6, 2009:?